1/20
Looking for a short overview of what was agreed last night on #EUETS?
Here a little 🧵 with the main outcomes
You can find @CANEurope’s press release here: caneurope.org/ets-negotiatio…
Looking for a short overview of what was agreed last night on #EUETS?
Here a little 🧵 with the main outcomes
You can find @CANEurope’s press release here: caneurope.org/ets-negotiatio…
2/20
AMBITION 🔴
Remains off track with 1.5 target 🌍🔥
ETS 2030 target increased to 62% (from 61% EC), but mainly a trick with numbers since the cap trajectory is weakened due a split of rebasing (90m in 2024 + 27m in 2026)
LRF is 4.3% (2024-2027) and 4.4% (2028-2030)
AMBITION 🔴
Remains off track with 1.5 target 🌍🔥
ETS 2030 target increased to 62% (from 61% EC), but mainly a trick with numbers since the cap trajectory is weakened due a split of rebasing (90m in 2024 + 27m in 2026)
LRF is 4.3% (2024-2027) and 4.4% (2028-2030)
3/20
AMBITION 🔴
Cumulative emissions over the whole period are only marginally better than the EC proposal: 12,295 Mt (EC: 12,309 Mt)
Still, compared to status quo the revised ETS will roughly save 1,486 Mt cumulative emissions compared to the baseline (2x 🇩🇪 annual emissions)
AMBITION 🔴
Cumulative emissions over the whole period are only marginally better than the EC proposal: 12,295 Mt (EC: 12,309 Mt)
Still, compared to status quo the revised ETS will roughly save 1,486 Mt cumulative emissions compared to the baseline (2x 🇩🇪 annual emissions)
4/20
RESILIENCE 🟡
No changes to EC proposal
Higher intake rate of 24% until 2030 + buffer intake rate + updated, but still static thresholds (lower: 833m, upper: 1,096m) + limit MSR size to 400m - review in 2026
RESILIENCE 🟡
No changes to EC proposal
Higher intake rate of 24% until 2030 + buffer intake rate + updated, but still static thresholds (lower: 833m, upper: 1,096m) + limit MSR size to 400m - review in 2026
5/20
POLLUTER PAYS PRINCIPLE/CBAM😡
Christmas is early for big polluters! 💶💶
Free allowances for CBAM sectors will phase out, but only by 2034 with more than 50% after 2030, leaving heavy polluters with massive amounts of free pollution permits worth hundreds of billion in €🤑
POLLUTER PAYS PRINCIPLE/CBAM😡
Christmas is early for big polluters! 💶💶
Free allowances for CBAM sectors will phase out, but only by 2034 with more than 50% after 2030, leaving heavy polluters with massive amounts of free pollution permits worth hundreds of billion in €🤑
6/20
POLLUTER PAYS PRINCIPLE/CBAM😡
Assuming a carbon price of 85 EUR/tCO2 this agreement means EUR 417 billion in industry protection!
(more than 6x the agreed support for vulnerable households)
🤯
POLLUTER PAYS PRINCIPLE/CBAM😡
Assuming a carbon price of 85 EUR/tCO2 this agreement means EUR 417 billion in industry protection!
(more than 6x the agreed support for vulnerable households)
🤯
7/20
POLLUTER PAYS PRINCIPLE/CBAM😡
Free allowance phase out timeline:
2026: 2.5%
2027: 5%
2028: 10%
2029: 22.5%
2030: 48.5%
2031: 55%
2032: 62.5%
2033: 80%
2034: 100%
POLLUTER PAYS PRINCIPLE/CBAM😡
Free allowance phase out timeline:
2026: 2.5%
2027: 5%
2028: 10%
2029: 22.5%
2030: 48.5%
2031: 55%
2032: 62.5%
2033: 80%
2034: 100%
8/20
POLLUTER PAYS PRINCIPLE/EXPORT REBATES 🟡
The Parliament’s notorious provision on handing out rebates for exporting industries under CBAM was rejected 🙌
However, MS can still funnel some of the freed up allowances coming from conditionality (next point) for extra support
POLLUTER PAYS PRINCIPLE/EXPORT REBATES 🟡
The Parliament’s notorious provision on handing out rebates for exporting industries under CBAM was rejected 🙌
However, MS can still funnel some of the freed up allowances coming from conditionality (next point) for extra support
9/20
CONDITIONALITY 🟡
Though no quicker end of free allowances (at least) free allowances are made partially conditional:
Companies need to
- implement energy audit recommendations
- develop carbon-neutrality plan (20% worst performers)
👉Otherwise = -20% of free allowances
CONDITIONALITY 🟡
Though no quicker end of free allowances (at least) free allowances are made partially conditional:
Companies need to
- implement energy audit recommendations
- develop carbon-neutrality plan (20% worst performers)
👉Otherwise = -20% of free allowances
10/20
POLLUTER PAYS PRINCIPLE/BENCHMARK 🟠
While the hot metal benchmark exemption remains in the ETS, mainly profiting big steel producers, the annual improvement rate of the minimum benchmark will increase by 0.3% (instead of 0.2%).
A small win, but still a win
POLLUTER PAYS PRINCIPLE/BENCHMARK 🟠
While the hot metal benchmark exemption remains in the ETS, mainly profiting big steel producers, the annual improvement rate of the minimum benchmark will increase by 0.3% (instead of 0.2%).
A small win, but still a win
11/20
ETS REVENUES FOR CLIMATE 🟢
The biggest win of last night: MS have to use all their ETS revenues for investments in climate action and just transition, despite hard push back from Council (read DE + frugals). However: no binding target for climate finance spending 😒
ETS REVENUES FOR CLIMATE 🟢
The biggest win of last night: MS have to use all their ETS revenues for investments in climate action and just transition, despite hard push back from Council (read DE + frugals). However: no binding target for climate finance spending 😒
12/20
MODERNISATION FUND 🔴
Despite the Parliament and EC pushing for full fossil fuel ban, the agreement now still allows fossil gas investments by 5 low-income MS (🇨🇿🇸🇰🇷🇴🇱🇹🇭🇷) of at least EUR 4.8 bn for energy production + more on CHP and gas infrastructure
MODERNISATION FUND 🔴
Despite the Parliament and EC pushing for full fossil fuel ban, the agreement now still allows fossil gas investments by 5 low-income MS (🇨🇿🇸🇰🇷🇴🇱🇹🇭🇷) of at least EUR 4.8 bn for energy production + more on CHP and gas infrastructure
13/20
ARTICLE 10C FREE ALLOWANCES 🟢
The infamous Article 10c that allowed free allowances to be handed out to fossil fuel utilities in low income MS is deleted
This is rather a pyrrhic victory as most eligible MS already signalled that they were not planning to make use of these
ARTICLE 10C FREE ALLOWANCES 🟢
The infamous Article 10c that allowed free allowances to be handed out to fossil fuel utilities in low income MS is deleted
This is rather a pyrrhic victory as most eligible MS already signalled that they were not planning to make use of these
14/20
INNOVATION FUND 🟡
The Innovation Fund that provides investments for clean technologies will be beefed up to amount to around EUR 40 bn and also finance Carbon Contracts for Difference
INNOVATION FUND 🟡
The Innovation Fund that provides investments for clean technologies will be beefed up to amount to around EUR 40 bn and also finance Carbon Contracts for Difference
15/20
NEW SECTORS/MARITIME 🟡
Shipping emissions will be covered by the ETS as of 2024 🚢
Scope: 100% of all intra-EU + 50% of extra-EU emissions
Exceptions for small islands, outermost regions until 2030
Coverage of non-CO2 emissions (mainly CH4 + N2O) as of 2026 + review
NEW SECTORS/MARITIME 🟡
Shipping emissions will be covered by the ETS as of 2024 🚢
Scope: 100% of all intra-EU + 50% of extra-EU emissions
Exceptions for small islands, outermost regions until 2030
Coverage of non-CO2 emissions (mainly CH4 + N2O) as of 2026 + review
16/20
NEW SECTORS/WASTE 🟡
Waste incineration not included yet, but up for review in 2026 with possible inclusion as of 2028
🗑️
NEW SECTORS/WASTE 🟡
Waste incineration not included yet, but up for review in 2026 with possible inclusion as of 2028
🗑️
17/20
NEW ETS 1/2 🚗🏠
A new ETS will start in 2027 to cover all fossil fuel combustion outside the existing ETS, mainly in road transport and buildings, but also small industries and private jets and yachts
NEW ETS 1/2 🚗🏠
A new ETS will start in 2027 to cover all fossil fuel combustion outside the existing ETS, mainly in road transport and buildings, but also small industries and private jets and yachts
18/20
NEW ETS 2/2 🚗🏠
If fossil fuel prices remain high until 2027 -> start in 2028
EP moved away from splitting private and commercial segments + secured safeguards, including price stability mechanism if EUA price in new ETS above 45 EUR + strict revenue spending criteria
NEW ETS 2/2 🚗🏠
If fossil fuel prices remain high until 2027 -> start in 2028
EP moved away from splitting private and commercial segments + secured safeguards, including price stability mechanism if EUA price in new ETS above 45 EUR + strict revenue spending criteria
19/20
SOCIAL CLIMATE FUND LINKS 🤝
Fund size: EUR 65 billion due to the larger scope of new ETS
25% co-financing by MS increases revenues available to support vulnerable households to EUR 86.7 billion for the period 2026-2032
Direct income support possible up to 37.5% of fund
SOCIAL CLIMATE FUND LINKS 🤝
Fund size: EUR 65 billion due to the larger scope of new ETS
25% co-financing by MS increases revenues available to support vulnerable households to EUR 86.7 billion for the period 2026-2032
Direct income support possible up to 37.5% of fund
20/20
That's it for now, more assessments to come
Until then, congrats to all involved fighting for more EU climate action and a socially just transition!
Fight continues - until then: happy holidays! 🎄
That's it for now, more assessments to come
Until then, congrats to all involved fighting for more EU climate action and a socially just transition!
Fight continues - until then: happy holidays! 🎄
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